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The game-changer

By Jonathan BlumFirst Published: December 21, 2009: 6:14 AM ET

You could say Roberto Velozzi has automotive blood.

Growing up in El Salvador, he was forever doodling futuristic cars in his notebooks; his father even owned a Mercedes-Benz dealership. But rather than enter the family business, Velozzi, 38, earned a material science degree at UCLA. After graduation he landed a job at the Jet Propulsion Lab in Pasadena, where he worked on direct-methanol fuel-cell technology and continued to dream up concepts for alternative vehicles in his spare time.

By 2007 he was ready to go public with his ideas, most notably a plug-in hybrid featuring a turbine engine that burns just about anything: gasoline, diesel, biodiesel, methanol, ethanol and, with some modification, natural gas. After giving a radio interview about his work, Velozzi was contacted by Germany-based Bayer AG. The pharmaceutical company has an automotive division in Auburn Hills, Mich., that supplies plastics for most GM and Ford vehicles.

In Velozzi, Bayer found a potential partner who could help them promote their latest advances in lightweight, state-of-the-art automotive plastics. "We work with Velozzi to show the potential of our technology," says David Loren, manager of Bayer's alternative-energy vehicle division.

The Bayer partnership gave Velozzi leverage to forge similar relationships with other automotive suppliers, including Ashland and Montreal-based Nanoledge. While he declined to reveal his total investment to date, he estimates that his approach has saved 50% of the expense of a traditional car prototype, which can run $3 million to $4 million.

"We are very proud to work on this project," says Benoit Balmana, managing director of Nanoledge. "Velozzi was able to put together the right automakers to get vehicles off the ground. He has built a very impressive group."

Velozzi and his confederacy of car parts makers currently have two autos in development. The Velozzi is a street-legal, 770-hp, two-door sports car able to go from zero to 60 in less than three seconds, with a top speed of about 200 mph. The Solo is a more mainstream hybrid-electric crossover that will reach 130 mph, fetch 100 mpg and go from zero to 60 in about six seconds, Velozzi claims.

Both cars will use a 50-pound microturbine multifuel engine based on Velozzi's concepts. Both cars will also feature parts that are 40% lighter and more durable -- from Bayer and Velozzi's other partners -- than those of similar cars. Prototypes for both vehicles are expected to ship in the second quarter of 2010, according to the company and several of its suppliers.

The Velozzi is expected to cost from $700,000 to $1.3 million per vehicle, while the Solo will be a lot more affordable, roughly $40,000. Despite the entrepreneur's proven knack for partnering with mainstream carmakers, analysts say Velozzi will be subject to the same pressures that have hobbled the current car industry: decades-old manufacturing plants, management and labor friction, and complex international supply chains that sap efficiency -- plus an insatiable desire for capital.

"This is such a capital-intensive business that it's tough for smaller names to succeed," says Rebecca Lindland, director of industry research at IHS Global Insight, a research firm in Lexington, Mass. "This doesn't necessarily mean that smaller companies won't succeed if they have serious capital behind them, like Hyundai had with Hyundai Group back in 1986."

Naturally, Velozzi and his partners disagree. "There is too much going on for it not to happen," says John Beatz, product manager at Ashland, which supplied specialty adhesives and other attachment technologies to the consortium. "If we didn't think so, we wouldn't be wasting our time."

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